Will Making a Small Claim Increase My Car Insurance Premium Later

Yes, making a small claim is likely to increase your car insurance premium. A small claim reduces your No Claim Bonus (NCB), leading to a higher premium at renewal. According to The Indian Express, approximately 1.77 lakh people have died due to road accidents across the country in 2024. This shows why we have seen an increase in motor insurance claims nationwide in the recent period. Continue reading this to learn more about whether car insurance premiums will increase later if a small claim is made.

Contents

• Why Does Car Insurance Premium Increase After Making a Small Claim?
• Strategies to Follow to Minimise Car Insurance Premiums
• When Car Insurance Claims Won't Raise Your Premium?
• Final Thoughts
• Frequently Asked Questions

Why Does Car Insurance Premium Increase After Making a Small Claim?

Here are the underlying reasons for the small car insurance claim premium increase:

1.No Claim Bonus

No Claim Bonus (NCB) is a discount offered as soon as you complete each claim-free policy period. If there are no claims filed for five years continuously, you can avail a maximum discount of 50% on your Own Damage premiums. Thus, after filing a claim, cancel the NCB immediately to ensure the premium returns to its pre-discount level at policy renewal. 

2. Premium Loading

Filing multiple claims during policy tenure can make policyholders a liability to the insurance company. In such a case, the premiums increase considerably. In insurance terms, this is commonly known as premium loading. The extent to which the cost will increase depends on several factors, including the vehicle's condition, the nature of the claim, and the customer's claim history. 

Also read: What Happens to Your NCB When You Sell Your Car?

Strategies to Follow to Minimise Car Insurance Premiums

Here are the strategies to follow to prevent small claim insurance increases and pay higher premiums:

1. Avoid Raising Claims

If there are minor damages in your car, avoid filing claims. Frequent claims result in reduced No Claim Bonus (NCB) and increased premiums. According to IRDAI, policyholders are eligible to receive up to 50% NCB and to reduce insurance premiums significantly. 

2. Install Anti-theft Device

Installing an anti-theft device is essential to eliminate the risk of vehicle theft. The majority of insurers also offer discounts on car insurance premiums for vehicles equipped with an anti-theft device. 

Pro tip: Ensure the anti-theft device installed in your car is certified by the Automobile Research Association of India (ARAI). 

3. Choose a Higher Voluntary Deductible 

Choosing a higher voluntary deductible reduced the insurer's liability. Also, it significantly lowers the car insurance premium at renewal. 

Pro tip: Always choose an affordable voluntary deductible, as you will need to pay it when filing a claim with your insurer. 

4. Opt for No Claim Bonus Protection Add-on

Choosing a No Claim Bonus Protection add-on cover keeps your discount the same even after filing claims under your car insurance plan. This discount is valid for use during renewal to reduce premiums. 

When Car Insurance Claims Won't Raise Your Premium?

Sometimes, filing a car insurance claim won't increase your future costs. Here are two situations where your premium and No Claim Bonus (NCB) usually stay safe:

• Third-Party Claims: If another driver hits your car, their insurance company pays for the repairs. Because you are not using your own policy's coverage, your premium remains unaffected.

• Acts of Nature: If your car is damaged by severe weather, like hail or a falling tree branch, insurers often label this as a "no-fault" event, meaning your rates won't automatically spike.

Final Thoughts

A small claim insurance increase might not happen immediately, but filing minor claims repeatedly can impact your premium and No Claim Bonus. Whether to file a claim depends on the repair expenses and the deductible amount. Carefully taking claim decisions and following safe driving habits can lead to lower car insurance expenses in the long term. 

Looking for an affordable car insurance policy with significant add-ons to include, like NCB protector and engine protector? Well, consider the ACKO car insurance policy that offers customisable motor insurance plans as per your budget. Visit us now and get a quote for your car!

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